Organizational Structure Impact on Employee Attitude

1 INTRODUCTION

The problem with all major organisations and even small businesses are the organisational structure they use and work with. How limited the resources are and even how employees are ranked and how they should work in teams and in what type of relationship they can work with the other employees. The study of how employees react towards these structures and how they perform under these structures can show how important it really is for organisations to implement the correct structure for there specific environment the organisation is working in.

When looking at factors such as the organisational structures itself, employee performance and attitudes, productivity, the factors influencing the structures, decentralisation and centralisation, one can identify if there is any relationship between the structures chosen and employees performance and attitudes.

Employees attitudes and performance has an impact on how the organisation performs, and if every employee’s work is done correctly and if employees enjoy their working conditions. Now if a organisational structure has an influence on the performance and attitude of employees organisations should study these problems and make use of new structures to improve employees, to give them a productive and innovative working team to achieve the competitive edge and advantage.

2 LITERATURE REVIEW

Can organisational structure have an impact on employee attitude and performance? And why?

Organisations strive to be the best competitor in the environment they are competing in, now if the structure they are using can have an influence on how employees are productive, they should examine this fact, productivity must be high for any organisation to achieve the competitive advantage. But if low can take the organisation down the drain.

The organisational structure is the way of doing business, how each change is implemented and how each job description is made, how the communication of the organisation will work and the strategic plan to improve productivity.

If one then take the elements of an organisational structure and examine them to see if it can make a difference in how work is done and managed. These elements are decentralisation, centralisation and levels of management, and these elements are the main foundation of any organisational structure. But how can the structure have an influence on the attitude and performance of employees? Peter Christensen has identified the main objective in the study of employee’s relationship with organisational structure. He said that Maslow’s theory of needs identifies the security and safety needs, and is safe to say that all employees who had security and safety in their working environment will have a positive reaction towards the management and organisational structure if coordinated correctly. How do we give employees security and safety in a working environment, one work on the attitude and performance of each employee. By examining this problem and illuminate it from working conditions one can have a structure that helps employees react better and work faster and harder. The main objective of the study is to identify and examine if this is true and why it is true (Wohner 2011).

3 ORGANISATIONAL STRUCTURE DEFINED

Organisational structures is the coordination of a specific organisation’s individuals and team work. If an organisation coordinates the individual’s work they can achieve all goals and objectives set. A organisational structure is one of few tools an organisation can use to coordinate and manage all employees, because of the way it shows the different reporting relationships, cut out the “middleman” in the communication structure and identifies the employee’s actions and how they come together. All types of organisations can use structures, some differ from others but all structures have some advantages and disadvantages. Even though an organisation has the best structure it is not something the organisation should leave and not manage, some of the best structures have failed because of a lack of management and it is not the best suitable structure for the environment the organisation does business in (Carpenter, Bauer & Erdogan 2009).

4 EMPLOYEE PERFORMANCE DEFINED

Employee performance is a set of standards set out for each employee’s behaviour in his or her working environment. The specific criteria not only focuses on how the employee makes use of his time, by doing his work, but can be compared by some standards set out by the employer (Moore 2011).

5 EMPLOYEE ATTITUDE DEFINED

Attitude is a set beliefs, values and feelings to make a person act in the way they do. But if used in the context of employee attitude, there is a bigger picture to the word attitude. There is several elements of employee attitude:

If a employee is interested in the job/work they are doing.

If the employee doesn’t need to be supervised.

If the employee can plan ahead.

If the employee has a positive outlook on the environment.

If the employee is contributing towards other work.

(Clark 2011).

6 PRODUCTIVITY DEFINED

“Productivity can be defined as the overall output of goods or services produced divided by the inputs needed to generate that output.” (Robbins & Coulter 2003: 527).

Some factors which can have a impact on productivity is: employee attitude, the owner (boss), health, working environment, working equipment, outsourcing and downsizing.

7 TRADITIONAL STRUCTURE VS NEW MODERN STRUCTURES

By examining an organisations structure one can identify one of two management styles, these management styles indicate how the organisation is run and if employees perform better or worse. The two main styles are:

A hierarchical management structures (traditional structure).

A flatter and more open “humanistic” management structures (New modern structure).

(Organisation Structure: the two main types 2011).

7.1 The traditional organisational structure

Traditional organisational structure’s most common fact is that it shows the boundary between the management level and the lower levels (normal working employees). The only reason for this boundary is to show that management is first on the hierarchy and that all decisions has to be made by them. Whereas employees are seen as bottom dwellers and they are unimportant in their working environment, this however gives the management more stress and has an impact on the training and motivation for the rest of the employees. There then follows a reaction on employee attitude and how the employees act towards management.

The traditional structure has two levels:

Level one: Managers

The three levels inside the first levels are:

1.1 Top management

1.2 Middle management

1.3 Lower management

Level two: Employees

This type of structure is very ancient and research shows that humans has used it from the start of humanity. However the structure is common it has some advantages and is most used if a group has to work together to find solutions for problems. This type of management style is used in armed forces and is also known as the military management style (Organisation Structure: the two main types 2011).

7.2 The modern organisational structure

The main difference between the new structures and the traditional structures is that there is no clear boundary between employee and management in the new structure, but as stated there is some boundaries in the traditional ones. This type of structure is more flatter and open and employees and management can be seen as equal persons aiming for the same goal. This gives employees the right to use their creativity and receives rewards for the work they have done. Rewards = satisfied employees = positive employee attitude = higher productivity.

Some aspects of modern structures are:

Individuals and teams who can manage themselves.

Employees become multi skilled.

Training investments increase.

Few status distinctions.

More goals are achieved.

Employee security is higher.

Outsourcing becomes more flexible.

A more stable structure.

(Organisation Structure: the two main types 2011).

8 TYPES OF MODERN ORGANISATIONAL STRUCTURES

The six main organisational structures:

Functional Organisational Structure

Geographic Organisational Structure

Product Organisational Structure

User/Market Organisational Structure

Hybrid Organisational Structure 

Matrix Organisational Structure

(Ledbetter 2003).

9 PROBLEMS WITH ORGANISATIONAL STRUCTURES

Organisational structures can never show all of the links involved in the organisation.

Communicating with other employees on different levels.

Department conflict.

Quality problems.

The time it takes on developing products takes longer.

Customer demands become to high for certain levels.

(Liebowitz & Associates 2008).

Some organisations find it difficult to respond (Organisation Structure: the two main types 2011).

10 THE FACTORS INFLUENCING THE CHOICE OF STRUCTURE USED

The size of the organisation: some companies will have a more intense chain of command and more levels in the hierarchy structure.

How well the employees are skilled: a Matrix structure will be preferred if the company has a high level of skilled workers.

The style of leadership preferred: if owners wish to keep control they will use a narrow structure and some who wants employees to make own decisions will use a more wider structure.

Type of objectives set for the organisation: if companies want to grow faster they will need a wide structure.

External factors: if the world or country is in recession the organisation will need to cut some of the employees and change the structure from wide to narrow or make it more flatter.

Technological changes: the development of administrative systems disables the layer of administration and the company will remove some of the employees in the category.

When organisations choose a structure they should be careful, the wrong structure can have huge impacts on the communication, costs, how decisions are made, and in motivating employees. This has the same effect on the employees attitudes towards the structure and will end up in having lower productivity (Organisational structures 2009).

11 DECENTRALIZED AND CENTRALIZED ORGANISATIONAL STRUCTURES

Centralisation Decentralization

11.1 Description of centralization and decentralization

Centralisation: more important decisions are made at the higher levels of the structures.

Decentralization: many decisions are made at lower levels, this gives employees the motivation to be creative and be innovative, and solve the problems in their own sectors.

(Carpenter, Bauer & Erdogan 2009).

11.2 Centralisation

Definition: Centralisation is a process in which the decision making is assigned to the different higher levels of the structure.

Centralisation keeps employees from the knowledge and information, when an organisation uses only top management to make decisions they take away the creativity of employees and only tell employees what to do. What happens to employees when they aren’t motivated and self manageable, they cant solve problems on their own, if top management is to slow for the decision making process.

Centralisation has a broad span of control in top levels and more tiers in the structure of the organisation (Centralization and decentralization 2011).

11.3 Decentralization

Definition: It is a process where lower levels of the organisation has decision making privileges.

Decentralization is the movement of decision making to some of the other department of the organisation, these departments can be the branches, other divisions and some of the subcontractors. If given all employees the right to make decisions, it gives the organisation more creativity, knowledge and ideas to work with. Employees are given more authority and can improve their attitudes if they fell wanted in the organisation.

The structure’s span of control is smaller and more levels are given.

(Centralization and decentralization 2011).

11.4 The three forms of decentralization

Deconcentration: this is the lowest level of decentralisation and decisions are made by lower levels of the organisation.

Delegation: Is a more advanced system of decentralisation, the decisions are made by lower levels but they have more authority in the organisation.

Devolution: this type of decentralisation only uses autonomous organisational units when making decisions.

(Centralization and decentralization 2011).

11.5 Strengths of centralisation

Organisational change is made by the top levels and uses the vision of the leaders.

The decision making process is strong and based on the visions of the higher management.

The execution of the decisions made, is fast and coordinated and are able to respond much faster in with some of the major problems.

Conflict is restricted, this is because only higher management can make decisions and everyone has to do what is expected from them.

(Centralization and decentralization 2011).

11.6 Strengths of decentralisation

Decentralisation focuses more on bottom-up decision making, culture of the organisations employees and of the organisational culture and the training of employees.

The decision making process is more detailed and democratic.

The execution of decisions is more emergent and flexible to change.

(Centralization and decentralization 2011).

12 HOW ORGANISATIONAL PERFORMANCE IS AFFECTED BY ORGANISATIONAL STRUCTURE

From small business ownerships to bigger organisations wants better performance in all their levels, from production to human resources. This is the vision of most companies to be better as their competitors by performing better.

The main idea of an organisational structure is to improve decision making and to identify how the organisation is working and who has the authority to make the important decisions and what team works in which department and programs. Employees wants to be recognized in a firm or in their department. When employees are recognized they are motivated. This gives them the positive attitude towards the organisation and the management of the organisation, when employees attitudes change from negative to positive they perform better, which is what organisations want; higher performance from employees. Now if the structure is made from the idea of the old traditional type of body, employees can’t get the motivation and positive attitude, which in turn gives a lower performance ratio towards the organisation or smaller business. This type of structure is not the only one that can have an negative influence on employees, even more modern structures can, if not used in the correct way or if the structure is not made for the type of organisation. (Meijaard, Brand & Mosselman. 2002).

13 EMPLOYEE ATTITUDE

The attitude of employees towards the organisation is counted as everything. When employees are motivated and positive they are more productive, and its not science to see it. Promoting from within will also increase the strong values and norms, build loyalty, and encourage employees to work harder to advance within the company which gives them the motivation they need to perform better. Negative attitudes can be a death sentence for any organisation. When giving employees the right to authority they become more positive and thus gives more attention towards their work and enjoys working for the company, they feel more wanted and more recognized by the organisation and then contributes more, this is what productivity is about: every employee giving their best to make sure the organisation performs. However employees with a negative attitude can drag the team or department down the drain and drain the positive attitudes of other employees and, in turn, make them negative (Stringer 2007).

13.1 Organizational Structure

There will always be some factors that an organisation cannot change or manage. And some of these factors may have an influence on the organisational structure and employee attitudes. Structures determine how the employees work together to achieve their goals, when the factors which have an influence on the structure cannot be managed the organisation cannot achieve what they are aiming for. One of these factors is organisational culture, culture is the way employees think, feel and behave, how their values and beliefs come together to work in a team or as an individual.

Some other factors can be:

Employee relationships: If employees work together in a team towards a goal they have to be able to work freely and have a positive relationship with other employees and management.(George & Jones, 2005).  

Communication: employees communicate with each other they build their relationships, to make sure they are able to do so, the organisational structure needs to be designed to accommodate these types of communication and to give employees the freedom to do so. This has a huge effect on how employees attitudes are towards each other and how they perform together when working in teams.

Employee satisfaction and reactions: employee satisfaction and reactions can be seen in seven different areas, namely; 1) internal work motivation, 2) growth satisfaction, 3) general satisfaction, 4) social satisfaction, 5) supervisory satisfaction, 6) security satisfaction and 7) pay satisfaction.

All of these factors have an influence on the type of structure used and in the end have an influence on how the employee’s attitudes are towards the organisation and then have the positive or negative output on the productivity (Oldham & Hackman 1981).

14 PRODUCTIVITY

How the specific organisational structure is designed and how the higher levels of management provide sufficient motivation for employees, can break the business or can turn it positive to become successful. The design of the structure should be studied thoroughly to ensure that there is no cracks or loose ends in the structure, if it isn’t, the organisation has the risk of demotivating employees and having a negative influence on their attitude, this can cause that the design has an influence on the productivity of the organisation and every employee, and in the end they may loose some employees in the future because of bad management and a lack of a perfect structure

(Math 2010).

Some factors influencing productivity:

Confidence: organisational structures that are more consistent gives employees security and a positive attitude. A consistent structure is one where the hiring of employees are within the organisation, when employees are promoted when they are effective and when employees can relax about job loss. If an organisation has a consistent structure employees will devote them selves and perform the best at the jobs, which gives an organisation a higher production rate (Math 2010).

Shared Goals: a transparent structure can have an impact on how employees strive towards the goals of the division, when an organisation can set their own goals and meet them with the goals of employees, they will be able to move the team into a better productive mode and achieve higher standards. Organisations can, for example; if they are busy with a new budget and plans for the next financial year, they can share it with middle management and ask them to do so with their own divisions and sectors. This will show the employees the goals of the organisation, when these goals are set each employee can set his or her goals which they want to achieve for the next year. Organisations can also notify employees when goals are met, so that these employees can see how their progress are going to make sure all goals are met and achieved (Math 2010).

Accountability: All organisations should have some type of reporting system, when this system is not in place, employees will not know what to do with problems or new ideas. The idea of these types of systems is to make sure that no information will be lost, when employees have challenges they should be able to talk to someone to make it better, if an employee has a better way of doing his job, it should be looked at and the new idea be explored. However if this system is not strong, this information can get lost and will demotivate employees and give them negative attitudes towards management which will have an influence on the culture of the organisation and success of the organisation (Math 2010).

15 WHY ORGANISATIONAL STRUCTURES IMPROVE THE ATTITUDE AND PERFORMANCE OF EMPLOYEES

Greater employee security: Maslow’s hierarchical model shows that any person’s security needs are high. If organisational structures improves employee security, the out come will be a employee with a positive attitude and a employee who will work towards goals. Employees will work together to achieve greatness and have an different job attitude.

Flexible management structures: Management is one of the most important factors of an organisation, how they do their work and how they treat employees. But within traditional structures one cannot have these types of flexible management structures, but can have it when in a modern structure. A flexible management structure gives the employees the motivation to be a part of a team and an idea. Employees that are given the opportunity to make a contribution towards a working program and give ideas are more positive in the sense that they feel wanted by the organisation and are not just a number on a system.

People become multi skilled: Working in a organisation that uses an traditional type of structure limits each employee’s job specifications. The implication of this is that employees can’t grow and become multi skilled. Working in other types of modern structures gives employees the freedom of to contribute in other programs and is able to give his own input when working in teams. The importance of multi skilled employees is not only to have one employee which can do two or more jobs, but it gives the employee motivation and self respect. Employees who are motivated and whose self respect is high has a positive attitude and will have an impact on productivity.

Self managing individuals: Every employer wants employees who can think for themselves. When an employee can manage themselves the manager or boss will not have to tell them what to do and how to do the specific task, will have less conflict and be more positive, the whole reason for this is no employee wants to be treated as if he is a child. Now, if all employees are self managed, management will not have to do check ups and can do their own work faster, this will increase the working capacity which will lead to higher production levels.

16 CONCLUSION

The examination of this thematic independent study shows that how an organisation centralises or decentralises, use different number of management levels and how the departmentalization is used is the key factors of an organisational structure. These factors of the structures has an affect on how creative and innovative employees are. Which has an outcome on the performance and attitudes of employees. When all these factors come together they form a organic and strong structure which in turn will have an positive outcome on the whole organisational environment. The organisational structure should be decentralized, efficient, flexible and help achieve innovativeness. There are some factors which also have an influence on the structure chosen such as the supplier’s number of clients and employee numbers but the organisations should always have in mind that they have to keep employees motivated and positive towards their working environment. For it is the employees who produce the service and/ or product. The study clearly identifies the relationship between a structure and employee attitude and performance and is clear to understand that this relationship is complex and should be thoroughly studied and reviewed to make sure it is the best structure fitted for the organisation to help employees perform better and positive. All organisations should choose between structures and choose the correct on for the environment and for employees, it is important to stay open minded and think clearly to make sure all employee are satisfied and have the right attitude and perform to the best of their abilities, structures can have an influence on these factors and because it does organisations should spend more time on the problem of how different structures can have a better production outcome.